Yet Another Victory for Educational Access as Canada’s Federal Court of Appeal Upholds Copyright Board’s Fair Dealing Analysis

This week (February 20-24) is being celebrated as the 4^th Annual Fair Use/Fair Dealing Week! A week that celebrates the importance of the doctrine of fair use/ fair dealing of copyrighted works in US, Canada and other jurisdictions! There wouldn’t be a better occasion to bring to you this post on yet another victory for fair dealing and education in Canada that came close on the heels of the recent victory for educational access in the DU photocopy case in India. Last month, the Federal Court of Appeal delivered its judgment in the judicial review sought by Access Copyright, the Canadian Copyright Licensing Agency against the Copyright Board’s decision certifying the annual royalty rates to be paid by K-12 schools for copying of works in its repertoire for 2010-15. This judgment, upholding the fair dealing assessment made by the Board, is the latest addition to the series of fair dealing challenges lost by this collecting agency over the years.

Background

Access Copyright (‘AC’) is a copyright collecting society in Canada that licenses reproduction of works whose copyright owners (often, authors and publishers) have authorized them to do so, on their behalf. In 2004, upon unsuccessful negotiations with the Council of Ministers of Education (‘CMEC’), AC had filed a proposed tariff for reproduction of works in its repertoire by K-12 schools in Canada (except Qubec) for certification before the Copyright Board of Canada. In 2009, the Board fixed the royalty rate as $5.16 per full-time student or equivalent (FTE) per year, noting that while copies of approx. 1.6 million pages met the test of fair dealing, those of approx. 16.9 million pages that were made by the teachers for distribution to their students as part of class instruction did not. The finding of non-fair dealing was upheld by the Federal Court of Appeal in 2010 but quashed by the Supreme Court in July 2012 in Alberta v. Canadian Copyright Licensing Agency, a landmark decision that we covered here. The Supreme Court found that the Board had misapplied the factors for fair dealing analysis as laid down in CCH Canadian v. Law Society of Upper Canada and remitted the matter to the Board. Upon reconsideration, the Board certified a reduced rate of $4.81 per FTE per year for 2005-09.

In December 2012, CMEC and others published an updated version of the fair dealing guidelines and refused to pay royalties to AC as per the 2005-09 tariff in light of the SC judgment and the amendment to Section 29 of the Copyright Act whereby ‘education’ was added as an allowable fair dealing purpose. They had proposed an annual tariff of $0.49 per FTE for 2010-12 and $0.46 per FTE for 2013-15 in response to the tariffs proposed by AC (i.e. $15 and $9.5 respectively). After hearing the arguments of both parties, the Board issued its decision in February 2016 finding that 97.2% of copying from books, 98.1% from newspapers, and 98.5% from periodicals constituted fair dealing and therefore did not trigger payment of royalty. Accordingly, it certified an annual royalty rate of $2.46 per FTE for 2010-12 and $2.41 per FTE for 2013-15. It is against this decision of the Board that AC sought a judicial review before the Federal Court of Appeal.

Federal Court’s ruling

The royalty rates were fixed by the Copyright Board by first determining the volume of compensable copying and then excluding from it the copying that fell within the scope of fair dealing under the Copyright Act. While determining the former, the Board first identified which of the copied works fell within AC’s repertoire and then assessed which of the copying involved reproduction of a “substantial part” of a work. AC challenged the findings made by the Board at each of these steps before the Federal Court of Appeal. The Court, however, refused to find any reviewable error in any of the Board’s findings (except the one pertaining to the impact of the coding errors on AC’s repertoire).

a. Reproduction of a “substantial part” of a work

One of the arguments made by AC was that the Board had erred in deciding that copying of one or two pages of a book did not amount to reproducing a “substantial part” of it and thereby excluding such copying from the volume of compensable copying. According to AC, the fact that teachers found one or two pages of a work relevant for teaching the students raises an assumption that they were not an insubstantial part of the work. The court rejected this argument, finding the Board’s decision to be reasonable. It agreed with the Board’s rejection of reinforcement of the now-discarded maxim “what is worth copying is prima facie worth protecting” and held that assessment of ‘substantiality’ of copying bears no relation to the copying choices made by a teacher for educating the students.

b. Fair dealing

The most important argument raised by AC was that there was an error in Board’s assessment of four out of the six fair dealing factors set out in the CCH decision, namely, the purpose, character and amount of the dealing, the nature of the work, alternatives to the dealing, and the effects of the dealing.

Amount of the dealing

AC argued that, while analyzing this factor, the Board considered only the quantitative portion of the work copied and not the qualitative importance of it. The court rejected this argument by noting that a fair dealing analysis is made in the first place only when a copy of a copyrighted work is otherwise found to be infringing for having reproduced the work in ‘substantial part’ in the qualitative sense and thus it would make little sense to reconsider the same at the second step of the test.

Character of the dealing

With respect to this factor, AC argued that the Board ought to have considered the aggregate number of pages copied, which in this case being about 300 million per year or approximately 90 per student per year tended to a conclusion that the dealing was unfair. The court rejected AC’s argument and did not find any error in the Board’s finding that what has to be assessed under this factor is whether the copies of the work were being ‘widely distributed’ and looking at the total number of copies made is not particularly helpful in this assessment. The Board had instead found “the size of a particular transaction or a set of transactions involving the same work” and “the person or group for whom the copy was made” to be relevant considerations under this factor. Further, the court observed that even if the aggregate volume of copies is taken into account, the figure of 90 pages per student per year does not support the view that this factor could only tend towards unfairness of the dealing.

Effect of the dealing

As per AC, the Board had erred in restricting its analysis under this factor to the effect of the dealing on the market of particular works copied and not considering the evidence of negative impact on unlicensed copying on the publishers’ market in general. The court refused to accept this argument observing that the Board was reasonable in doing so because it merely applied the CCH decision, wherein it was held that “[i]f the reproduced work is likely to compete with the market of the original work, this may suggest that the dealing is not fair”. It further noted that the Board had not disregarded the evidence submitted but simply found that it only showed that unauthorized copying was only one among the many causes attributed to the decline in book sales such as open educational resources movement, digital sharing, emergence of new technologies etc.

Alternatives to the dealing

AC had produced some evidence as to the alternatives to copying available with the K-12 schools throughout 2010-15 (such as “McGraw Hill Ryerson’s iLit digital database which allows teachers to pick and choose works from the publisher’s online database to create their own custom “book of excerpts””) and according to it the Board had erred in disregarding this evidence in the fair dealing assessment under this factor. The court disagreed with AC and found the Board’s assessment to be acceptable as the Board had considered the evidence but found it to be “greatly limited in scope and detail” and there was no evidence on the availability of alternatives in relation to majority of the works copied during 2010-15.

Accordingly, the court did not find any reviewable error in the fair dealing assessment made by the Board and the amount of copying excluded from the volume of compensable copying on this basis.

Conclusion

This much-welcome judgment of the Federal Court of Appeal demonstrates that the law of fair dealing is fairly well settled in Canada with the courts consistently providing a meaningful interpretation to the user’s right of fair dealing in furtherance of access to education. This Canadian decision together with the recent Delhi High Court decision in the DU photocopy case, which interpreted Section 52(1)(i) of the Indian Copyright Act to permit making and distribution of course packs by teachers to students as long as it is for the purpose of ‘educational instruction’, indicate that perhaps this is how the future regimes will swing and not allow copyright to stand in the way of accessible and affordable education. And thus, perhaps it is time for academic publishers and copyright collectives to accept the legal realities and adapt to them instead of resorting to futile litigation in the hope of maximizing their profits.

Image from here